HP rejects Xerox’s takeover bid yet again, doubts Xerox’s viability
Category: #headlines  By Hrishikesh Kadam  Date: 2019-11-25
  • share
  • Twitter
  • Facebook
  • LinkedIn

HP rejects Xerox’s takeover bid yet again, doubts Xerox’s viability

HP’s board of directors last week turned down Xerox’s takeover bid stressing that the deal would undervalue HP. Xerox had reportedly offered HP $22 per share (77% cash and 23% stock) for the company. HP seemingly believed that the deal would not be in the best interest of investors.

However, it now appears that the two companies may be on the verge of a war. The tech giant has yet again turned down Xerox’s $33.5 billion takeover offer ahead of a Monday deadline to accept the proposal or face a hostile takeover bid.

HP responded by calling Xerox’s offer opportunistic, claiming that the merger just didn’t make sense.

Xerox’s aggressive words and actions clearly suggest that the company intends to force a potential merger based on opportunistic terms and lacked adequate information, wrote Enrique Lores and Chip Bergh, HP’s CEO and Chairman respectively, in a letter addressed to John Visentin, Xerox’s CEO.

HP re-expressed its concerns regarding the deal considering the current state of Xerox’s business doubted Xerox’s ability to pull off such as transaction.

The company is still quite uncertain of Xerox’s ability to raise the cash part of the proposed offer and has concerns over the prudence of the subsequent outsized stocks even if Xerox managed to obtain the financing, Lores and Bergh noted.

Also read: HP’s board turns down takeover bid from Xerox citing undervaluation

They also mentioned that the printing services giant had missed consensus revenue valuations in four of the last five quarters. Since June 2018, the company’s revenue has reportedly dropped from $10.2 billion to $9.2 billion.

The HP executives alleged that during private discussion between the two parties in August and September, HP had repeatedly raised its questions and concerns which Xerox failed to address and chose to walk away.

Instead of choosing a more productive path, Xerox decided to pursue a hostile approach, HP claimed.

The personal computer giant also stated it had other options to create value for investors, including merger and acquisition strategies and share buybacks. Apparently, HP felt it is important to clarify that the company is not reliant on a Xerox merger.
 

Source credit: https://www.businessinsider.in/tech/news/hp-rejects-xeroxs-33-5-billion-bid-ahead-of-a-monday-deadline-to-take-it-or-face-hostile-takeover-bringing-the-two-tech-giants-closer-to-a-proxy-war/articleshow/72215293.cms

  • share
  • Twitter
  • Facebook
  • LinkedIn


About Author

Hrishikesh Kadam    

Hrishikesh Kadam

A graduate in electronics and telecommunication engineering, Hrishikesh Kadam has always found writing fascinating. Driven by a never-ending passion for content creation combined with a bit of experience in writing personal blogs, Hrishikesh blends his technical knowl...

Read More

More News By Hrishikesh Kadam

Ford to use McDonald’s coffee waste to make headlights and other parts
Ford to use McDonald’s coffee waste to make headlights and other parts
By Hrishikesh Kadam

Ford has made a number of efforts in recent years to incorporate recycled materials in its cars: from using soy products to make seat cushions, to making wiring brackets using tomato skins, to designing bamboo-based interior console components and ma...

Seedland launches China’s first UGV for residential communities
Seedland launches China’s first UGV for residential communities
By Hrishikesh Kadam

Seedland Group, one of China’s leading real estate companies, recently deployed Hachi Auto, an autonomous vehicles designed for residential communities, in its Guangzhou-based community Boston Ivy. Evidently, this makes Seedland the first compa...

WuXi ATU and GeneMedicine partner to develop oncolytic virus products
WuXi ATU and GeneMedicine partner to develop oncolytic virus products
By Hrishikesh Kadam

Oncolytic viruses are an emerging class of immunotherapy agents that preferentially infect and destroy cancer cells. Leading biotechnology companies are focusing their attention on the development of oncolytic virus products. WuXi ATU Co., Ltd., a w...